FES CYPRUS NEWSLETTER Nr. 57 / MARCH 2017

Contents

1. Cyprus Problem ...... 2

2. Greek Cypriots ...... 5

Economic Developments ...... 5 Domestic Developments ...... 5 Labour Relations and Trade Unions ...... 6

3. Turkish Cypriots ...... 8

Economic Developments ...... 8 Relations with Turkey ...... 8 Domestic Developments ...... 9 Labor Relations and Trade Unions ...... 10

4. FES Cyprus Events ...... 11

FES NEWS

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FES CYPRUS NEWSLETTER Nr. 57 / March 2017

1. Cyprus Problem Anastasiades and DISY, the party the latter formerly led, for abstaining from the vote which In February, a disruption in the peace negotia- effectively allowed for the proposal to pass. tions for a settlement of the Cyprus problem Anastasiades in response to the criticism occurred following the decision passed by the condemned the Turkish Cypriot reaction Greek Cypriot parliament to commemorate the describing it as an exaggeration over ‘‘a mere January 1950 ‘Enosis’ (Union) referendum. This reference to a historical fact’’. historic event was significant to the Greek Cyp- In the Turkish Cypriot narrative, Enosis – the riot majority who voted their preference for the Island’s union with Greece – was considered as a island to be annexed to Greece. The decision was major security threat to the survival of the considered unacceptable to the Turkish Cypriot Turkish Cypriot community. The desire for the side, subsequently leading to the breakdown of union of the Island with Greece developed dur- the leaders’ meeting on February 16. The ing the British Colonial Period (1878-1960) and development occurred amid crucial efforts to culminated in a violent anti-colonial struggle, reach further convergences on the internal which also led to intercommunal violence from issues around the Cyprus problem and ahead of 1955 to 1959. The demand for the partition of a new International Summit on Cyprus concern- the island namely ‘’Taksim’’ and the unification ing the issue of securities and guarantees, of one part of the island with Turkey while origi- expected to take place in March. nally accepting the unification of the southern On February 10, a proposal submitted by far- part with Greece, represented the official Turk- right party ELAM, which would entail public ish Cypriot response to the Enosis demands of schools to include a short annual commemora- the Greek Cypriots after 1956. Both desires for tion of the 1950 plebiscite about the union of the Enosis and Taksim respectively led to the island with Greece in the curriculum, was breakdown of the independent bicommunal approved by the Greek Cypriot parliament with Republic of Cyprus established in 1960 and 19 votes. All opposition parties with hard-line ultimately to the division of the island in 1974. views on the Cyprus question voted in favour. Today neither unification with Greece nor the Ruling party DISY abstained the voting while unification of the northern part of the island with main opposition party AKEL opposed the Turkey are supported by significant groups proposal. The vote caused a strong reaction by within the respective Cypriot communities on Turkish Cypriot leader, Mustafa Akinci who both sides of the divide. However, a great immediately cancelled the Greek Cypriot and number of Turkish Cypriots is convinced that Turkish Cypriot negotiators meeting, between many Greek Cypriots still want Enosis, and this Andreas Mavroyiannis and Ozdil Nami scheduled misperception is kept alive by Turkish and Turk- for February 14. In addition, Akinci criticised ish Cypriot media and hard-line politicians for

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propaganda purposes. This forms the back- about the meeting. “The UN Envoy described the ground to the strong reaction within the Turkish incident at yesterday’s leaders meeting by Cypriot community. editing out all the facts and this has raised ques- tions about his trustworthiness” said Akinci, On February 16, the scheduled leaders meeting adding that what Eide had left out was that the between Anastasiades and Akinci ended Greek Cypriot leader had left the table and had abruptly due to disagreement among the two not returned. over the Greek Cypriot Parliament’s controver- sial decision. According to reports the meeting Following the controversial vote and the unsuc- ended when Akinci walked out of the building cessful outcome of the leaders meeting, Akinci after a frustrated Anastasiades left the room, set two preconditions in order to return to the slamming the door behind him to take a break. negotiations table. These included Anastasiades Since then, the matter of which of the two lead- to publicly admit that the vote was wrong and ers left the negotiations table first has become action to be taken by the Greek Cypriot leader to another contested issue of the Cyprus problem annul the decision. In a bid to salvage the despite the fact that UN Special Adviser, Espen situation, DISY tabled a legislative amendment Barth Eide is known to have backed the Greek on February 17, removing the power to deter- Cypriot leader. mine public school commemorations from the House and bestowing it to the Ministry of Educa- Akinci denied reports in the Greek Cypriot press tion, thus opening the way for the government that he had walked out of the meeting: “Once we to repeal the decision. Meanwhile, Anastasiades exchanged our views on the issue … the UN conceded on February 18 that the vote was Secretary General’s Special Advisor tried to wrap indeed a mistake but stressed that he could not up the discussion, stating that steps were compel an independent legislature to reverse it. required to address the demands of the Turkish He also reiterated that the Turkish Cypriot side Cypriot side. The Greek Cypriot leader angrily was overreacting. stated that he had nothing else to say before walking out of the meeting”. Akinci added: “We Within a deteriorating climate the scheduled have had instances in the past when Mr. leaders meeting of February 23 was cancelled Anastasiades lost his temper. But no matter following Akinci’s refusal to attend as his what our differences may be, we have always preconditions were not met by Anastasiades. On maintained our respect. Under the current the one hand, Akinci reiterated that he will circumstances, it was not possible to ignore his return to the negotiations table as soon as the actions”. Furthermore, Akinci said that he vote was annulled. Anastasiades on the other started to question his trust in the UN Special hand professed his readiness to resume negotia- Advisor Espen Barth Eide after his statements tions. The month ended with Anastasiades

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sending a letter to UN Secretary General, spokesman, Nicos Christodoulides as an excuse Antonio Guterres on February 28, explaining the for the Turkish side to scupper the process. reasons behind the derailment of the negotia- The Turkish side in turn accused Anastasiades of tions process, thus placing responsibility on the Turkish side. Anastasiades was not the only one being more focused on the presidential elections who wrote a letter to the Secretary General. In a of February 2018. Moreover, Akinci stated that the Greek Cypriot side was not consenting to fill letter to Antonio Guterres, Akinci described the Greek Cypriot parliament’s decision as a major in the details on the subject of Turkish Cypriots’ blow in the attempts made by the Turkish effective participation in the decision making bodies comprising a federal state and Cypriot side to foster trust between the two communities in Cyprus and called for the UN to Anastasiades’ reluctance to make compromises interject so that the bill is revoked. “Enosis was on the issue of the rotating presidency. the main reason for the Cyprus problem, and this The Bi-communal teachers’ platform “United aspiration has brought nothing but pain and Cyprus” held a demonstration in front of the sorrow to Cyprus… Sadder still, is the fact Greek Cypriot parliament to protest its resolu- Anastasiades’ party assisted in the bill being tion to mark the Enosis plebiscite in schools. passed,” the Turkish Cypriot leader said. Speaking on behalf of the platform, Costis Achni- otis said that the resolution did not bring any The Enosis vote provided an opportunity for substantial change to the existing practice in the each side to embark on a blame game. The Greek Greek Cypriot schools, nor was it significant with Cypriot side claimed that the Turkish side had respect to the educational process itself. “It does been seeking for a pretext to stall the talks however have political significance amidst the pending the April 16 referendum in Turkey, negotiations for a Cyprus settlement, sending implying that Turkish President Recep Tayip very negative signals to the Turkish Cypriot Erdogan is playing the nationalist card in order to community through a symbolic reference to the pass constitutional amendments domestically genesis of intercommunal conflict”, he added. and has no interest in progress in the talks before the referendum Furthermore, according to In early February, before the collapse of negotia- Anastasiades the derailment in the talks was tions, the two chief negotiators Nami and owed to Turkey’s reluctance to budge on the Mavroyiannis along with their teams of experts, issue of security and guarantees before the April attended an event in London where possible 16 referendum. The demand for Turkish ways of funding the settlement were discussed. nationals to receive the same four freedoms as The European Commission and other EU citizens was characterized by government international bodies, such as the IMF and the World Bank, have been also exploring how to

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fund a solution and participated as observers in (ESM), which, together with the International the talks in Geneva in January. Monetary Fund (IMF), financed Cyprus’s bailout four years ago with €6.3bn and €1bn respectively. The second largest creditor was the Russian Federation with an outstanding loan of 2. Greek Cypriots €2.5bn. The public debt also included €4.2bn in European Medium Term Notes traded on the Economic Developments secondary market abroad, €2.1bn in domestic securities, broken down to €1.2bn in Moody’s Investors Service maintained its posi- government development stock, €566.3m in tive outlook on the Cypriot banking system citing bonds purchased by individual investors, and an expected improvement in the banks’ funding €299.9m in treasury bills, the PDMO said. and a drop of non-performing loans ratio to 42% Government debt to the Central Bank of Cyprus by the end of the year. “We expect improving was €1.2bn in December, while that to the Coop- loan quality to translate into modest profits for erative Central Bank was €370.4m. Government the Cypriot banks in 2017, for the second debt also includes €229m in guarantees for loans consecutive year,” Melina Skouridou, an extended through the European Financial assistant vice president at the rating company Stability Fund to Greece, Ireland, and Portugal. was cited as saying in an emailed statement. The rest consists of loans mainly from the “We also expect further improvements in fund- European Development Bank. The increase in ing conditions for banks as depositor confidence public debt in 2016, a year in which the strengthens and money that left the banking government balanced its budget, is mainly system during the financial downturn in 2013 attributable to the €1bn seven-year government returns”. The credibility of Cypriot banks, which bond issued in July. The government used up reported a 49% of non-performing loans in Sep- €558m to buy back debt over the past months to tember, will also improve over the next 12 to 18 smooth out future maturities. months, Moody’s said citing a report headlined “Banking System Outlook – Cyprus; Stronger Domestic Developments Funding and Gradual Improvements in Asset Quality Drive Our Positive Outlook” available to On February 17 the Nicosia criminal court set subscribers on Moody’s website. March 1 as the day of sentencing, for former According to the Public Debt Management Office attorney-general Rikkos Erotokritou, two other (PDMO) Cyprus’s public debt rose by €357.1m in lawyers Andreas Kyprizoglou and Panayiotis a year, to €19bn last December. The largest Neocleous, and the Andreas Neocleous law firm. creditor was the European Stability Mechanism These individuals were found guilty on charges

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of bribery, conspiracy to defraud, and conspiracy Turkish Cypriot’s reaction was ‘‘unacceptable’’ to subvert the course of justice. The four were while AKEL leader, Andros Kyprianou said to have colluded to arrange for Erotokritou characterized the move to commemorate the to launch the criminal prosecution of five Russian Enosis Plebiscite in public schools as ‘‘political individuals and one company, at the behest and schizophrenia’’. For its part, Nicolas to the benefit of the Neocleous law firm, which Papadopoulos of DIKO described Akinci’s had long been battling them in Cypriot and demand to annul the parliamentary decision as Russian courts over ownership and control of “unwarranted and ludicrous” and said it was Providencia, a trust-fund worth millions. In indicative of his overall intransigent stance. exchange, Erotokritou was rewarded for his Likewise denouncing Akinci, Giorgos Lilikas of troubles with the Neocleous law firm failing to the Citizens Alliance stressed that this was an appear in court on the day a lawsuit the former opportunity for the Greek Cypriot side to AG filed against legacy Laiki bank – then undertake “a campaign to inform the interna- represented by the Neocleous law firm – tional community on the real reasons for the demanding that over €500,000 of his personal deadlock in the talks.” Greens MP George loans be offset against his ‘haircut’ deposits. Perdikis blasted Akinci for his “unacceptable and provocative behaviour.” Two DIKO members Yiannis Armeftis and Marinos Cleantous announced their intention of Labour Relations and Trade Unions leaving the party following its support of far- right Elam’s proposal to introduce an annual A framework agreement was made in the public commemoration in public schools of the January sector between PASIDY and the government, 1950 Enosis (Union) plebiscite. EDEK too fell instituting a mechanism whereby a ceiling will be subject to criticism from some of its members as enforced in the percentile salary increases at the some of its MPs upvoted Elam’s proposal. EDEK level of the nominal GDP. This agreement is MEP Demetris Papadakis stated after the vote along the same lines with the one made in the that the move was upvoted by some out of fear semi-public sector in January covering the period of being accused of not being Greek enough. 2015-2018. It also stipulates the de-freezing of Former House speaker and former EDEK leader positions that have been frozen since 2013. Yiannakis Omirou, too condemned the upvote of There is some improvement in the remuneration the proposal as parliament allowed a “bigoted of over-time and shift work pay and it also opens entity ELAM, affiliated with neo-fascist, neo-Nazi the road for the creation of a Provident Fund for Golden Dawn”, to present its legislative initiative those hired after 2011 and who are not covered as “politically legitimate”. DISY leader Averof by any pension fund. This comes after the failure Neophytou conceded that the parliament’s of the government to push through this approval was “untimely” but stressed that the

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mechanism as a permanent and automatic one will now work upon a new voluntary redundancy in the public sector, via law. The rest of the trade scheme to be ready by the summer. Further unions of the public sector (the smaller trade voluntary redundancy schemes are also being union ASDIK, the nurses’ union PASINO and the prepared by other banks. All such schemes that education unions) are opposed to the agreement have been enforced so far have secured in made by the government and PASIDY stated that advance either the consent or the toleration of this is unfair and unbalanced and complained ETYK, the bank employees’ trade union. It is that they were excluded from the negotiations. estimated that in the last 5 years 2.000 bank They have also stated that they are in contact employees in Cyprus have been made redundant with their lawyers as to the form of their while there were also about 800 newly hired reaction. with the total sectoral employment falling from 9.000 to 7.800 persons. Most of the newly hired The Human Resource Development Authority are employed by fixed term contracts, (HRDA) will prioritize schemes targeting recipi- something which is opposed by ETYK. ents of Guaranteed Minimum Income that will allow them to have six months of work experi- A 24-hour strike of the customs’ office workers ence in the public, semi-public and NGO sectors. took place in the Limassol port contributing further to the chaos created in the first week of SEK called upon the government to deal with the its operation under a privatized regime. The pressing problems of unemployment and workers' strike addressed the inconvenience and poverty that have driven thousands of fellow hardship as a result of the organizational citizens into economic and social misery. Social inefficiency and the indifference of the authori- policy needs to be reinforced along with the ties. The procedures enforced by Eurogate, the protection of labour rights through the exten- firm which now runs the port have caused sion and strengthening of collective agreements, considerable delays and have provoked reac- concluded SEK in its statement. tions from the Chamber of Commerce as well. In The voluntary redundancy scheme proposed by the meantime, political parties have accused the Hellenic Bank which included a tax free lump government of treating the whole privatization sum has been rejected by the Tax Registrar, on process in a hasty manner. The General Auditor the basis that it comes too soon after the previ- has characterized the deal made with Eurogate ous scheme and because in this period the bank problematic while AKEL has proposed the re- has hired new employees. Hellenic Bank claimed nationalisation of the Limassol port. that the new staff was necessary because of the The Council of Ministers decided to defreeze 64 new skills and qualifications needed as a result of public sector promotion positions and 6 hourly the dramatic changes in the banking sector and paid ones in the public sector and a further 94

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ones in the broader public and semi-public sec- Kemal Durust, the Minister of Public Works and tor. At the same time it extended the freeze of Communication said that the Telecommunica- new hiring converting it into one of indefinite tions Department will be restructured in line duration. These decisions will need to be ap- with a model which will involve private-public proved by the parliament in the coming months. cooperation – but not privatized. Durust also reassured that the rights and jobs of the current employees will be safeguarded in the transition. “They will experience no problems. The 3. Turkish Cypriots Privatisation Law is quite clear. The main struc- ture and backbone will be state run. The entire Economic Developments fibre optic cable network will belong to the state” he added. In an interview with Turkish Cypriot daily Kibris Postasi, Odul Muhtaroglu, the Undersecretary of Relations with Turkey the State Planning Organization said that foreign university students’ contribution to the Turkish Cypriot Daily Kibris newspaper reported economy has been rising, helping the economy that over 100,000 Turkish nationals living in the to run a current account surplus for the first time northern part of the island and an additional in 2015. While the figure was $535.6 million in 50,000 Turkish students studying in the north 2013, it rose to $636.2 million in 2015; estimated will be eligible to vote in Turkey’s constitutional figure for 2016 is around $660 million. referendum, which will be held on April 16. Muhtaroglu said that the students on average spend 9-10 months on the island every year. A cooperation agreement on social security has Students also contribute to the local economy by been signed between the “TRNC1” and Turkey. spending money in almost all sectors. He also The agreement updated an earlier one signed in added that currently there were 80,000 foreign 1987. According to the Minister of Labor and students registered in higher education within Social Security, Hamza Ersan Saner thanks to the 15 institutions. new agreement, among other things, Turkish

1 The Turkish Republic of Northern Cyprus (TRNC) is the entire island is now considered to be a member of only recognised by the Republic of Turkey. While for the European Union. However, the acquis commu- Turkey and the Turkish Cypriots, Mustafa Akinci nautaire is suspended in northern Cyprus pending a serves as President of the TRNC, the international political settlement to the Cyprus problem (see community considers him the communal leader of Protocol no. 10 of the Accession Treaty). the Turkish Cypriots. As the government of the Republic of Cyprus remains internationally recog- nised as the government of the whole of the island,

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Cypriot civil servants who are temporarily based the negotiating table. Akinci responded that it in Turkey and “TRNC” nationals undertaking was up to the people to weigh the statements their education in Turkey will be able to benefit made by the Prime Minister (and Foreign from healthcare services in Turkey. Minister who has also been critical of Akinci’s handling of the negotiations). He however Domestic Developments pointed out that the current minority govern- ment did not speak on behalf of the people. According to a survey conducted by the CMIRS Akinci added that it would not be possible to (Center for Migration, Identity, and Rights Stud- reach a settlement by demanding to keep onto ies), the percentage of Turkish Cypriots wanting 36% of the land nor was it possible for any Turk- a solution has dropped by 15 percentage points ish Cypriot to accept a map that left only 25% of over the past year from 80.52% in January 2016 the land under Turkish Cypriot control in the to 65.29% in January 2017. Furthermore, 39.16% event of a settlement. “If a settlement is to take of the participants said that they would vote place, the percentages will be more or less “no” in a possible referendum on the solution of around this figure [29.2]. I have a responsibility the Cyprus problem, with only 25.51% saying to prepare the people for the truth” he said. that they would vote “yes”, whereas in January During the foundation laying ceremony of a new 2016, 49.6% replied that they would vote “yes” hospital in Morphou, Prime Minister Ozgurgun and 20.2% said they would vote “no”. The study said that such investments were proof that the also found out that that in January 2017 only Turkish Cypriots had deeply embedded roots in 19.51% of respondents were optimistic about Cyprus. He also highlighted the importance of reaching a deal with Greek Cypriots compared to the government attached to the area, whose 41.33% just 12 months earlier. The majority of return to the Greek Cypriot side in the context of people still viewed Mr Akinci as the TRNC's "most territorial adjustment is considered by the Greek credible and appreciated politician" with an Cypriot administration as an indispensable approval rating of 3.29 out of 5, while trust in the element of a negotiated settlement. “We are all government fell from 2.37 in October 2016 to gathered here today to show that the 2.26 in January 2017. perceptions created and the feelings of Criticizing President Akinci, Prime Minister uncertainty regarding Guzelyurt (Morphu) are Ozgurgun said that the Turkish Cypriot side had unnecessary” Ozgurgun said. made a grave concession and strategic mistake The Greek Cypriot Parliament’s decision to mark by presenting a map during the peace talks held the 1950 Plebiscite for Enosis (union with in Geneva in January. Ozgurgun argued that with Greece) attracted the criticism of opposition this move, the Turkish Cypriot side had nothing left to bargain with and had revealed its hand at

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parties, trade unions and civil society organiza- will reduce the working week to 35 hours. The tions. The Turkish Cypriot parliament issued a public-sector employees will be working a 40- joint declaration condemning the decision, hour week during the remaining 8 months in which was also sent to the UN Secretary General. winter. The new working hours will come into effect on the second Monday of May. Summer Left wing political parties, which are not repre- working hours were scrapped in 2010 when the sented in the parliament, and Primary School UBP was in power. Teachers Trade Union (KTOS) issued a press statement to call on the two leaders to free In February, another worker lost his life in a themselves of the influence of fascist elements. workplace accident. According to Ugur Ergun, Representatives of the United Cyprus Party the former head of the Workers' Health and (BKP), the Communal Liberation Party-New Safety Union, who was interviewed by Forces (TKP-YG), the New Cyprus Party (YKP), Kibris/Cyprus Today, the risk of being killed at and KTOS read out the press statement in front work in the construction sector in the northern of the Turkish Cypriot president’s office. part of Cyprus is 16 times higher than that in the UK. In other sectors, the risk is 4.5 times higher Labor Relations and Trade Unions than the Euro-15 average. Ergun held the Ministry of Labor responsible for this high risk as The new gross minimum wage has been set at it is not enforcing health and safety regulations. 2020 TL (€511). The new rate came into force as Eight people died and 79 were injured in 83 of the first day of February. Commenting on the workplace accidents in the "TRNC" in 2016. minimum wage, Hamza Ersan Saner, the Minis- ter of Labour said “the minimum wage is the salary that should be paid to an unskilled laborer.

It should not be perceived as the salary that should be paid to everyone, no matter what line of occupation they are in”. Saner also said that it was the first time the rise in the cost of living which was recently announced by the State Planning Organisation, 10.19%, was reflected onto the minimum wage.

The government and trade unions reached an agreement on changing working hours in the public sector. According to the deal, the summer working hours that will be in place for 4 months

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4. FES Cyprus Events April

Friday 21.04.2017 14:00 – tba. March 2017 Saturday 22.04.2017 9:00 – tba.

Centre for Dialogue/CAD/FES Friday 24.03.2017 14:00 - 18:00 Workshop Saturday 25.03.2017 9:00 – 16:00 ‘Media in Cyprus: Role and Responsibility,’ 3rd Institute for Interdisciplinary Cypriot Studies Cyprus Dialogue (University of Münster)/FES Conference tba. Larnaca, Cyprus When the Cemetery becomes Political – Deal- ing with the Religious Heritage in Multi-Ethnic Not open to the Public Regions: Cyprus, Lebanon, the Balkans …

Institute for Interdisciplinary Cypriot Studies (University of Münster)  Münster, Germany Friday 25.04.2017 tba. Open to the Public FES  Workshop Friday 31.03.2017 10:30 - 12:30 Good Governance and the Impact of the Rue du Taciturne 38, 1000 Brüssel)/FES Economic and Financial Crises in Cyprus

Round Table Discussion tba. Nicosia, Cyprus Cyprus at Crossroads. Reunification now or Everlasting Division? Not open to the Public

Friedrich-Ebert-Stiftung, EU Büro  Brussels, Belgium

Open to the Public Friday 28.04.2017 tba.

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FES CYPRUS NEWSLETTER Nr. 57 / March 2017

World Vision MEERO/FES Imprint:

Launch Friedrich-Ebert-Stiftung (FES) White Book of Best Practices Launch Office Cyprus 20, Stasandrou, Apt. 401 tba. CY 1060 Nicosia Nicosia, Zypern

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Hubert Faustmann, Yiannis Charalambous, Friday 29.04.2017 tba. Sertac Sonan, Grigoris Ioannou, Ute Ackermann- Boeros and Sophia Papastavrou Cyprus Academic Dialogue/FES Layout: Workshop Christiane Paparoditi

CAD workshop on PEACE PROCESS in Cyprus If you want to subscribe or unsubscribe to this (free) tba. monthly newsletter, please send an email to: Christiana Paparoditi [email protected] Nicosia, Cyprus

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